WAEC Economics 2016 Objective — Question 8
Question 8 of 50 from the West African Examinations Council (WAEC) Economics 2016 Objective paper, with the correct answer and a full explanation.
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8. What effect will an increase in price have on the total revenue of a firm whose product has inelastic demand? Total revenue will (a) increase (b) fall (c) fluctuate (d) remain unchanged
- A. increaseCorrect
- B. fall
- C. fluctuate
- D. remain unchanged
Explanation
An increase in the price of a firm whose product has an inelastic demand will increase its total revenue because only very little buyers will stop or reduce their purchase.
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